China-Pakistan Economic Corridor and Its Influence on Perceived Economic and Social Goals: Implications for Social Policy Makers

Abstract

China-Pakistan Economic Corridor (CPEC) has initiated as a mega project by China and Pakistan to benefit economic growth and free trade. CPEC is in the initial stage, and policymakers and government officials consider CPEC as a “game-changer” for both the countries, as, potentially, it will generate numerous business and employment opportunities for local citizens as well as international outreach. Recently, a plethora of research has discussed both the macro as well as micro level advantages of CPEC, but has only been focused theoretically due to the emerging term. How beneficial the CPEC for a local community, and how it is perceived by the local people is not yet discussed by prior studies. This research fills the gap and examines the potential benefits of CPEC for local citizens of Pakistan. A mixed method approach was adopted to collect the data, as survey through structured questionnaire was conducted with a total of 445 citizens (323 male and 122 female), and a face-to-face interview with 32 citizens (28 male and four female) from the communities living along the CPEC routes. The findings show that, through the development of CPEC, local citizens perceive significant improvement in their lives, particularly the quality of life, better employment opportunities, and poverty reduction, while they have an insignificant perception about environmental protection and quality of education. This research recommends policy makers to build new educational institutions, encourage investors to invest in the industrial sector, and formulate environmental strategies to unleash maximum benefits of CPEC. Moreover, government official and policy makers may create awareness of CPEC projects and their benefits among the communities to get their support.

1. Introduction

Sustainable Development Goals (SDGs) have become central focus worldwide due to their favorable outcomes in health, environment, sustainability, quality of life, and economic development [1,2,3]. Social policy makers have intensely emphasized on different indicators to achieve these SDGs. Countries worldwide, irrespective of their status (underdeveloped, developing, and developed) have devised different strategies and developmental projects to achieve the SDGs [4,5]. Similarly, China and Pakistan as a bilateral venture conceived a project consisting of a long route for the betterment of the economies and mutual benefits. “China Pakistan Economic Corridor” (CPEC) is the overarching project, which is initiated for the purpose of benefits local communities and economic growth of both the countries, thereby consisting of multiple projects [6]. Some of the sub-projects already started under the CPEC are listed in the Appendix A

Table A1. CPEC-energy priority projects.

Sr.	Project Name	MW	Cost ($Million)
1	Port Qasim Electric Company Coal fired, 2 × 660, Sindh	1320	1980
2	Sahiwal 2 × 330 MW Coal-fired, Power Plant, Punjab	1320	1600
3	Engro Thar 4 × 330 MW coal-fired, Thar, Sindh	1320	2000
4	Surface mine in block ll of thar Coal field, 6.5 metric ton per annum (mtpa), Thar, Sindh		1470
5	Gwadar coal/LNG/Oil power Project, Gwader	300	600
6	HUBCO coal power plant 1 × 660 MW, Hub Balochistan	660	970
7	Rahimyar Khan Coal Power Project, Punjab	1320	1600
8	SSRL Thar coal block 1–6.5 metric ton per annum (mpta) Thar, Sindh		1300
9	SSRL 2 × 660 MW Mine Mouth power Plant, Sindh	1320	2000
10	Quaid-e-Azam 1000 MW solar park, Bahawalpur, Punjab	1000	1320
11	Dawood 50 MW wind Farm, Bhambore, Sindh	50	125
12	UEP 100 MW wind farm, Jhimpir, Sindh	100	250
13	Sachal 50 MW Wind Farm, Jhimpir, Sindh	50	134
14	Suki Kinari Hydro Power Station, KpK	870	1804
15	Karot Hydropower station, Ajk & Punjab	720	1420
16	Material to Lahore transmission Line		1500
17	Material to Faisalabad Transmission Line		1500
	CPEC-Energy Activity Promoted Project
18	Gaddani power Park Project (2 × 660 MW)	1320	3960
19	Gaddani power Park project (Jetty + infrastructure)		1200
20	HUBCO coal power Plant 1 × 660 MW, Hub Balochistan	660	970
21	Kohala Hydel Project AjK	1100	2397
22	Pakistan wind Farm ll 2 × 50 MW (Jhampir, Thatta, Sindh)	100	150
23	Thar mine mouth Oracle, Thar Sindh	1320	1300
24	Muzaffargarh Coal Power Project, Punjab	1320	1600
25	Gas Power Plant 525 MW	525	550

,

Table A2. Transportation Infrastructure project.

Sr.	Project Name	MW	Cost ($Million)
	Road
1	KKH Phase ll (Thakot—Havellan Section)	118	1305
2	Peshawar-Karachi Motorway (Multan—Sukkur Section)	392	2846
	Rail
3	Expansion and reconstruction existing Line ML-1	1736	3650
4	Havelian dry port (450 M. Twenty-Foot Equivalent Units)		40

,

Table A3. Gwader Port city Projects.

Sr.	Project Name	Cost ($Million)
1	East-Bay Expressway	14,060
2	Gwader International Airport	23,000
3	Construction of Breakwater	12,300
4	Dredging of berthing area & channels	2700
5	Infrastructure for free Zone &EPZs port related industries	3200
6	Necessary Facilities of Fresh Water Treatment And Supply	13,000
7	Hospital At Gwader	10,000
8	Technical And Vocational institute at Gwader	1000

and

Table A4. Industrial Corporation Projects.

Sr.	Project Name	Status	Progress
1	Gwader Nawabshah LNG Terminal And Pipeline, 700 Km	To be inaugurated	40%
2	Haier & Ruba Economic Zone Phase ll	Feasibility stage	15%
3	Optical Fiber Cable from Rawalpindi to Khunjrab	Under construction	50%
4	DTMB Demonstration Project	Government MOU Signed	5%
5	Lahore Orange Line Metro Train	Under construction	60%
6	Promotion of TD-LTE commercialization in Pakistan	Feasibility Stage	15%

. Particularly, CPEC is aimed to configure multiple sectors, including health sector, educational institutions, industrial sector, economic zones, infrastructure, and employment across the length of the route of the CPEC project [7]. Although, the proponents of the CPEC enlists overambitious list of the benefits for the local communities as well as for the national economies; however, empirical research on CPEC projects and benefits to communities is rare. From a country’s perspective, the benefits of CPEC have been discussed in many studies. For instance, government and political bodies have already reported CPEC as a crucial indicator in various aspects, including standard of living and employment opportunities for local communities [6]. Specifically, we have known the one side of the story, the policy makers; however, it is not yet known how the local community perceives the benefits of CPEC and the projected development. This research fills the gap and examines the importance of CPEC development in the achievement of perceived economic goals named quality of life, employment opportunities, and poverty reduction, and two societal goals, namely educational infrastructure and environmental protection from local community’s perspective. Presently, Pakistan faces big challenges of security, terrorism, and GDP declining. In this backdrop, CPEC is considered a very potential project, which can promote free trade and overcome the major economic hardships of Pakistan and an the same time can also give a number of export related benefits to China [8].

CPEC can significantly help Pakistan in maintaining a good relationship with neighbor countries, such as India, Afghanistan, Iran, Bangladesh, and the Middle East. Most importantly, CPEC is a mega projects’ platform in building a stable route between Pakistan, China, and Europe [9]. CPEC is considered one of the most critical determinants in trade promotion and industrial growth [10]. Both of the governments (China and Pakistan) consider CPEC as a game changer, with 27 economic zones in spreading across both the countries [11], which will help in industrialization [10], economic growth [12], and development of the energy sector [13], etc. Although, these projects were primarily for the macro level targets; however, little attention, was given to local communities at the projects’ conception stages. Though only a few studies have recently attempted to examine the significance of the development of CPEC for local communities [6,14], the intended benefits of these projects to the local communities in terms of employment, education, and investment opportunities need to be examined from the local communities’ perspectives [14]. The benefits of local communities are significantly prioritized and emphasized in the SDGs. For instance, Kanwal, Chong and Pitafi, [6] claimed that many Pakistani citizens perceive positive outcomes through the development of CPEC. Particularly, local communities consider CPEC as a favorable factor for transport, infrastructure and environment [14]. Community-based benefits should be considered during mega project development because it can significantly affect project activities [15]. As suggested by the social exchange theory [16], if local communities perceive a development project to be favorable in terms of its outcomes towards the societal development, they will support it. The government needs to create awareness among the local communities regarding the pros and cons of the CPEC projects and involve local stakeholders in the decision making process, to gain their acceptance and ownership [17]. In terms of socio-economic benefits, the governments claimed that that the CPEC is considered as a “game-changer” for local communities, and then sharing it with the local communities would further strengthen the projects and will help in the timely completion of the projects by providing the requisite resources for the completion of the project [18].

This research aims to unleash the research question “Does the development of CPEC influence perceived environmental protection, quality of life, educational improvement, employment opportunities and poverty reduction?” These goals (economic and social) are the most important goals of any nation in term of SDGs [19]. Therefore, unleashing the communities’ perceptions and views about the mega projects of CPEC is an important task in the present day, because the informed consent from the local communities can assist policymakers in getting the desired goals. This research has potential significance for different stakeholders; for instance, the findings of this study would allow the local communities to support CPEC mega projects considering them beneficial for their future, such as job opportunities, infrastructure, high standard of living, and poverty reduction, etc. Policymakers and government officials would get the insights of the local communities and their perception about the projects and their intended benefits to them, which may enable the formers to make appropriate investment decision and would consider the projects, which can give maximum benefits to social policy with the lowest cost. Theoretically, this research contributes to the social exchange theory [16], which suggests that if local citizens perceive favorable outcomes of the projects, they will support in reciprocation, and while reciprocation, not only the existing benefits, but futuristic benefits are also considered while reciprocation. The findings are beneficial for both China and Pakistan to efficiently carry out the operational activities of CPEC through the support of local communities by involving them through the awareness programs. Additionally, this research can be implemented in both nations; China and Pakistan to facilitate and support their citizens through CPEC. The findings can become very important for attaining SDGs in both countries.

This research is outlined, as follows; Section two discusses theoretical background and generating hypotheses concerning perception of CPEC, Section three outlined the methodology, and results are interpreted in chapter four; and, implications and the limitations of the study are discussed in chapter five.

2. Generating Hypotheses Concerning Perceptions of CPEC

This section critically reviewed the existing literature and culminates in the development of the hypotheses, particularly, the relationship between the development of CPEC and the resultant improvement in three economic goals, quality of life, employment opportunities, and poverty reduction, and two social goals, educational improvement and environmental protection.

2.1. CPEC and Economic Goals

The governments of China and Pakistan claimed that the CPEC will bring favorable change in the lives of the local communities in both countries [20]. Generally, living standard and quality of life of a common man depend on several factors, but having adequate access to basic needs and necessities significantly contributes to the quality of life. As claimed by the governments from both the sides, the CPEC would affect the local communities in Pakistan, however the perception of the local communities needs to be explored [14]. The local communities could be eased out through these initiatives if they bring some positive changes to their personal and social, and economic wellbeing [21]. CPEC will directly or indirectly affect the households’ welfare through up surging industrial growth and competitiveness [22]. Favoring this notion, Ali et al. [14] claimed that CPEC is an emerging factor that can boost the progress of several industrial (SMEs, export and import) and non-industrial (education and health) zones, which have a significant multi-dimensional influence on local communities’ lives. CPEC will balance the energy consumption of various sectors and will alternatively increase the saving potential of the local community [23]. Government has also claimed several benefits for local citizens, including quality life and desirable status [24]. The benefits may not be limited to the citizens of Pakistan, but are equally crucial for Chinese communities. For instance, Blanchard [25] argued that both governments claimed these projects to be beneficial for the relevant communities, such as quality life, employment opportunities, and quality of education in the CPEC. They further claimed that rural areas will be connected with big cities and this interaction and integration will significantly positively influence the living standard of a common man. However, it is very important that these initiatives are to be positively perceived by the local communities to make them successful projects. Particularly, it is very hard to develop the positive perception of the neglected areas, such as the rural province Baluchistan, which will be significantly benefitted by CPEC in social welfare and standard living, but if it is positively perceived by the local communities [26]. CPEC initiatives are expected to create positive perception and will encourage the local non-governmental organizations to work for social welfare and societies benefits to spur their living styles [17]. CPEC will benefit the quality of life of a common citizen living in the host community [6].

As discussed earlier, CPEC is categorized as one of the major determinants of poverty reduction and is expected to start its operation in the near future to benefit Pakistan’s economy in terms of employment generation and poverty reduction [10]. For instance, as argued by Chen et al. [27], CPEC is a mega project that is expected to produce millions of jobs in various sectors, which will mitigate poverty. Similarly, [28] in 2017, about 30,000 Pakistani professionals, including management, engineers, doctors, IT experts and policy experts are being employed in various CPEC projects in Qasim port and Coal Power projects. CPEC is very beneficial for both the countries, as it will boost both economies through employment generation [29]. CPEC projects have the potential to generate employment opportunities in different sectors, such as energy, construction, infrastructure, and railways. Hence, the government promises to engage and consider the local communities to fill the jobs, to help them improve their overall social conditions [14]. In addition to these project based jobs, the local communities can capitalize on the investment opportunities, and the entrepreneurial ventures would further augment to the project created opportunities. For example, starting own business in the shape of the workshop, kiosk, real estate, and Burger, etc. with a low budget easily. CPEC will improve technical and economic cooperation, road network, construction of rail and industrial zones, new oil and gas pipelines, cable projects, and new trade linkage. In results, it is expected that the local communities will be able to work in different sectors and will secure jobs for their social wellbeing.

Under the CPEC, Chinese loans and investment will facilitate the operational activities of Pakistani business industries and the SMEs that are considered to be the backbone of the economy [13]. As mentioned earlier, CPEC will enable rural communities to start a local business with an affordable budget [29]. In other words, many people living in rural areas are unable to start their businesses due to a lack of financial resources and the lack of market demands. CPEC will encourage them and will boost entrepreneurial intention among rural individuals [30,31]. CPC can become a significant predictor of economic growth for both regions [32] because of its crucial role in improving various industrial sectors. Due to CPEC, inflow from China into the energy sector and infrastructure is already increased and more is also expected. This inflow will, in turn, spur economic growth and propensity of Pakistan economy [12]. For instance, Javid [33] claimed that CPEC has increased investment in both public and private infrastructure that is very crucial for economic growth. CPEC has significantly improved investment in the different industrial sectors including energy, road and oil and gas etc. which directly or indirectly contributes to economic growth [34]. CPEC will also increase regional cooperation and trade ties of both countries with other South Asian regions. Hence, it is expected that people in China and Pakistan will access adequate resources that will improve economic growth and will reduce poverty [35]. In general, CPEC will be a source of progress in various sectors including business and non-business in rural and urban areas of Pakistan. This will alternatively enhance the economic growth of Pakistan and the local communities will able to start a new business or finding jobs, which would develop a positive perception among the local communities about these projects. While considering the potential benefits, Pakistani citizens perceive a positive change in the economic goals. Therefore;

Hypothesis 1 (H1).

The development of CPEC will have a significant influence on the perceived quality of life in the mind of Pakistani citizens.

Hypothesis 2 (H2).

The development of CPEC will have a significant influence on perceived employment opportunities in the mind of Pakistani citizens.

Hypothesis 3 (H3).

The development of CPEC will have a significant influence on perceived poverty reduction in the mind of Pakistani citizens.

2.2. CPEC and Social Goals

CPEC cannot only improve the economic goals, but will also assist in societal goals, such as education opportunities and environmental protection. For instance, infrastructure development, such as schools, institutions, universities, and institutional transport have significant influence on the educational level of the local communities [36]. CPEC has the potential to improve not only the infrastructure and health care, but some of its projects are specially tailored to encourage the education of the local community. Most of the CPEC physical routes are passing through rural areas of Pakistan, where educational facilities are lacking and, hence, CPEC would benefit the communities in getting the basic education as well as the professional educations, which could help them to get jobs in their relevant fields. The literacy rate of a community is strongly related to the ease of access to the education facilities, such as the travelling time to reach the educational institution is one of the main factors [37]. As pointed out by Haq and Farooq [38], in the comparatively backward and less developed areas, one of the major reasons for a low literacy level is the long traveling time between their residences to the educational institutions. CPEC is expected to benefits the local communities in increasing the literacy levels by providing the relevant infrastructure to facilitate the transportation to the educational institutions [39]. Parsimoniously, the indirect influence of CPEC on education level is assumed from the increasing ratio of Pakistani students in Chinese universities. It gives positive signals for quality education to be promoted in Pakistan after the formal operation of CPEC activities. China and Pakistan have invested a huge amount in CPEC projects that can give prominent support in interaction and educational improvement [40]. The major advantages that are to be gained through CPEC mega projects include energy, defense, infrastructure, technology, and education of local communities [41]. The mega projects of CPEC will solve the energy and education problems in rural areas of Pakistan [24]. CPEC will improve the number of educational institutions, will reduce education travel distance, and will spread the benefits of education in the host communities that will positively contribute to educational ratio.

Pakistan faces a big issue of environmental pollution, health, and safety. CPEC can perhaps appear to be a significant predictor of environmental pollution and will promote positive environmental practices [14]. CPEC mega projects can threaten the environment, but policymakers need to consider health and safety management practices during the operation and infrastructure development [42]. China is moving very fast and has already initiated an environmental protection policy for CPEC while Pakistan is in the initial stage to build and formulate certain strategies [43]. Various projects under CPEC can significantly affect the environment but meanwhile, effective strategies are needed for favorable environmental sustainability [14]. Three major streams, environmental (e.g., air quality, noise, climate changes, and waste management, etc.), economic (jobs and prosperity, fair pricing, economic growth, competitiveness, and supply chain modes, etc.), and economic sustainability (road safety, distribution services, health of infrastructure/roads, access to markets, and disturbance in public areas, etc.) are directly or indirectly aligned with CPEC [44]. FDI enables host industries to invest adequate finance in CSR and environmental activities [45]. CPEC is also expected to increase financial inflow in the industrial sector, which can be invested in environmental activities and health and safety management practices. Malik [46] termed CPEC as “environmental corridor”, because of its potential benefits and role in the creation of a favorable environment for both China and Pakistan [47]. While considering the environmental pressure and degradation, China has felt to build ties with neighboring countries and has initiated trade projects such as the Belt and Road and CPEC [48]. For instance, Teo et al. [49] ascertained that several environmental policies are aligned with Belt and Road projects. Looking at the benefits, local communities are expected to positively perceive CPEC for education and environment. Hence, we hypothesize that

Hypothesis 4 (H4).

The development of CPEC will have a significant influence on the perceived quality of education in the mind of Pakistani citizens

Hypothesis 5 (H5).

The development of CPEC has a significant influence on perceived environmental protection in the mind of Pakistani citizens

3. Methodology

3.1. Research Design, Sample and Data

This study aimed to unleash the importance, from the perspective of the local communities, of CPEC in protecting the environment, enhancing the quality of life, improving education and employment, and decreasing poverty in the emerging market Pakistan. The nature of this research is quantitative and deductive, where empirical evidence is collected for testing the proposed hypotheses. To test the model, data are collected through a structured survey well as through interview from Pakistani citizens from the areas, where CPEC route crosses, such as Dera Ismail Khan, Lakki Marwat, and Khuzdar etc. We prepared the questionnaire in the English version, as Pakistani citizens easily understand it. However, where respondents faced problems, we helped them in understanding the questions. The questionnaire was divided into two sections. The first section was about the demographic detail (e.g., age, education, and gender) and the second section contained items of the main variables. We focused to survey more and more respondents from different areas where CPEC projects are actually started or soon going to be started in order to increase the validity of the research. We focused on educated people, at least in the sampled areas because less-educated respondents who have problems with literacy were among those who did not complete their questionnaire. Moreover, citizens with less education probably do not know detailed information about CPEC and the relevant projects. Hence, it might create a problem in interpretation of the data that were collected through non-representative sample, therefore, ignored contacting for data collection. We distributed 1000 questionnaires among individuals while using a hard copy approach as an email survey (and even respondents from those areas were no accustomed to emails and IT usage) does not give satisfactory results e.g., [50]. The Questionnaire was written in the English language, which is considered to be spoken as a second language in Pakistan. Where the respondents face problems in understanding, we helped them in understanding. This research surveyed the educated sector of Pakistan to know their perceptions regarding the CPEC. The reason for choosing the sector is that less-educated sector face problems in filling questionnaire and probably do not aware of the CPEC projects. This study does not only enable a common citizen to enjoy the importance of CPEC but also empowers government officials to articulate their policies. The data collection was completed in two months and we received 473 questionnaires from the respondents. However, 28 questionnaires were not correctly filled and were missing important information. Hence, only 445 useable responses were considered for further analysis to test the model. We received 44.50% response rate in data collection.

Table 1. Respondents’ Profile.

Respondents Description	Frequency	Percentage
	Questionnaire/Interview	Questionnaire/Interview
Gender
Male	323/26	72.60/81.3
Female	122/6	27.40/18.80
Age of the Respondents
20–30 Years	89/17	20.00/53.10
31–40 years	107/8	24.00/25.00
41–50 Years	97/5	21.80/15.60
51–60 Years	88/1	19.80/3.10
≥61 Years	64/1	14.40/3.10
Qualification
Bachelors and below	122/11	27.40/34.40
Masters	178/14	40.00/43.80
MS/MPhil	116/6	26.10/18.80
PhD	29/1	6.50/3.10
Total Respondents	445/32	100/100

illustrates the profile of the respondents who were surveyed via a questionnaire and interview. We interviewed people from the same areas where the CPEC routes existed. In this research, there were 323 males (72.60%) and 122 females (27.40%) that responded via questionnaire and 26 males and 6 females answered through interview. We collected data from the individuals aged more than 20 years, because individuals of less than 20 years are probably cannot adequately predict the benefits of CPEC mega projects. We classified them in five age groups. In the first age group, i.e., 20–30 years, 89 respondents participated in the survey, 17 participated in the interview; in the second age group (31–40 years), 107 participated in survey, while eight participated in interview; in third age group (41–50 years), 97 participated in the survey, while five participated in interview; in the fourth age group (51–60 years), 88 participated in survey, while only one participated in the interview; finally, in the fifth age group (61 and above years), 64 participated in the survey, while only one participated in the interview. The educational background indicates that 122 individuals who filled the questionnaire were a bachelor and below degree, 11 respondents in the interview have same degree, in the questionnaire, 178 respondents were those who have completed their master degree, while in the interview, 14 people who had the masters degree, questionnaire, there were 116 participants who have MS and MPhil degree, while six respondents in the interview have same level of education, and only 29 individuals were Ph.D. education who filled the questionnaire, while only one person was PhD from the interview.

3.2. Measurement of the Variables

Environmental Protection: Environmental protection is the indication of the safeguard of the environment to promote a pleasant environment. We used mixed items (e.g., adopted from Martín-Tapia, Aragón-Correa Rueda-Manzanares (2010) and self-developed items to measure environmental protection. A sample item is “CPEC will reduce environmental pollution in the area”.

Quality of Life: It demonstrates positive attributes of general life, community life, economic improvement and better opportunities that may be generated due to the operation of CPEC. We used four items to measure the quality of life of an individual citizen. These items were adopted from Lee, Kim, and Kim [51] and were modified to articulate the present study model. A sample item is “The quality of my life will be generally enhanced due to CPEC”.

Educational improvement: It indicates perceived improvement in the educational system, new educational institutions and educational ratio etc. We used eight items that were adopted from Kanwal, Chong and Pitafi [6], where a sample item shows “CPEC will provide the opportunity to get a quality education.”

Employment Opportunities: It indicates new opportunities for employment through CPEC. We used six items taken from Kanwal, Chong and Pitafi [6], of which the sample item is “CPEC will generate employment opportunities in the area”.

Poverty Reeducation: It describes a reduction in citizen’s poverty through CPEC. We used mixed items (e.g., adopted from [6,52] as well as self-developed items to measure poverty reduction through CPEC.

Development of CPEC: CPEC will enhance economic growth and propensity of the locals as well as nations. Hence, community support for the development of the CPEC is necessary. It is essential to create awareness of CPEC and its perceived benefits for the future [6]. We measured the development of CPEC with five items that were adopted from Kanwal, Chong, and Pitafi, [6] and Ali et al. [14], but have slightly modified.

All of the items were measured using five-points Likert scale, indicating strongly disagree 1 to strongly agree 5.

4. Data Analysis and Results

The data of this research are screened for normality and common method bias (CMB). For normality, we assessed skewness and kurtosis in SPSS and confirmed that the data are normal because all the factors have their skewness and kurtosis value in the acceptable range ±2 that was recommended by George [53]. Common method bias is tested through Harman one factor test in SPSS using the extraction method of principal component analysis. All the used items were considered for the process. We found six factors which have their eigenvalue greater than 1 and the first factor explained only 15.045% variance, which is less than the cutoff 50% [54]. The method displayed the nonexistence of CMB. Additionally, we applied the impact of a common latent factor on the measurement model and compared the model fits of measurement model run with a common latent factor and without a common latent factor. The model fits of without common latent factor were significantly better; CMIN/DF = 2.018, GFI = 0.89, AGFI = 0.87, CFI = 0.93, TLI = 0.93, NFI-0.88, RMR = 0.016, and RMSEA = 0.048 than with common latent factor measurement model; CMIN/DF = 2.970, GFI = 0.83, AGFI = 0.80, CFIB = 0.88, TLI = 0.85, NFI-0.83, RMR = 0.016, and RMSEA = 0.067, which confirmed the absence of CMB in the sample.

4.1. Exploratory Factor Analysis (EFA)

We have used mixed items (some of the items are adopted from previous studies while some items are self-developed); therefore, we applied EFA (see

Table 2. Exploratory Factor Analysis.

	Components
Items	1	2	3	4	5	6
cpec1	0.666
cpec2	0.756
cpec3	0.611
cpec4	0.601
cpec5	0.658
ep1		0.654
ep2		0.753
ep3		0.690
ep4		0.715
ep5		0.729
ep6		0.763
ql1			0.688
ql2			0.707
ql3			0.762
ql4			0.644
ei1				0.738
ei2				0.600
ei3				0.722
ei4				0.659
ei5				0.777
ei6				0.647
ei7				0.719
ei8				0.662
eo1					0.656
eo2					0.795
eo3					0.647
eo4					0.725
eo5					0.645
eo6					0.631
pr1						0.789
pr2						0.679
pr3						0.707
pr4						0.749
pr5						0.692

Note: Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. CPEC = China Pakistan Economic Corridor, ep = Environmental protection, qf = Quality of life, ei = Educational Improvement, eo = Employment opportunities, pr = Poverty reduction.

) to explore the relationship between the suggested items and unobserved variables. All of the items, (32) were entered into the process and executed principal component analysis via varimax approach. We found that the value of Kaiser-Meyer-Olkin Measure of Sampling Adequacy is 0.815, which is greater than 0.70, indicates a satisfactory sample size for EFA [55]. Bartlett’s Test of Sphericity--Approx. Chi-Square/df = 7973.822/561 and indicates significant results (p = 0.000). The factor loading of every item is greater than 0.60, which confirms the significant results of EFA. There was no major cross-loading in terms of factor loading, which satisfied the discriminant validity of the factors. We derived six factors with having eigenvalue greater than 1 displayed a unique variance [56].

4.2. Correlation

Table 3. Correlations.

Variables	AVE	C.R.	Age	Education	1	2	3	4	5	6
Age	-	-	-	-
Education	-	-	0.078	-
1. Environmental Protection	0.52	0.86	−0.045	−0.013	(0.72)
2. Quality of Life	0.55	0.83	0.063	−0.026	−0.042	(0.74)
3. Educational Improvement	0.57	0.88	0.051	−0.090	−0.013	0.068	(0.75)
4. Employment Opportunities	0.51	0.86	0.070	0.007	0.045	0.139 **	0.109 *	(0.71)
5. Poverty reduction	0.51	0.84	0.211 **	0.078	0.017	0.154 **	0.115 *	0.028	(0.71)
6. CPEC	0.53	0.85	0.387 **	0.084	0.093 *	0.226 **	0.095 *	0.296 **	0.372 **	(0.73)
Mean	-	-	-	-	2.33	3.03	3.80	3.20	3.09	3.76
S.D.	-	-	-	-	0.33	0.35	0.64	0.36	0.36	0.40
Skewness	-	-	-	-	−1.54	−1.81	−1.07	−0.07	−0.60	-0.61
Kurtosis	-	-	-	-	3.96	3.55	3.23	-0.01	0.63	0.78

Note: ** Correlation is significant at the 0.01 level (2-tailed). * Correlation is significant at the 0.05 level (2-tailed). AVE = Average Variance Extracted, C.R = Composite Reliability, discriminant validity is shown in bracket parallel to correlation value. SD = Standard Deviation.

provides the correlation matrix, which shows that there is a significant association between perceived environmental protection and the development of CPEC (r = 0.093, p < 0.05), a significant positive relationship between the perceived quality of life and the development of CPEC (r = 0.226, p < 0.01), a significant positive association between perceived educational improvement and the development of CPEC (r = 0.095, p < 0.05), a significant positive association between the perceived employment opportunities and the development of CPEC (r = 0.296, p < 0.01), and also a significant positive link between the perceived poverty reduction and the development of CEPC (r = 0.372, p < 0.01). None of the correlation value is greater than 0.80, which confirms the absence of multicollinearity.

4.3. Confirmatory Factor Analysis

Standardized factor loading, validity, and reliability of the items and factors have executed confirmatory factor analysis. The model fits criteria are met; CMIN/DF = 2.018, GFI = 0.89, AGFI = 0.87, CFI = 0.93, TLI = 0.93, NFI-0.88, RMR = 0.016, and RMSEA = 0.048, as per the suggestion of Hair et al. [56] and Tanaka [57]; all of the items have satisfactory factor loadings and were significantly (p < 0.001) related to their respective variables (see

Table 4. Items and Loadings.

Items	Variables	Estimate
	Quality of Life
ql1	The quality of my life will generally enhance due to CPEC development	0.73 ***
ql2	This community will become a desirable place to live due to CPEC development	0.74 ***
ql3	The opportunities for leisure or recreation activities in this community will increase due to CPEC development	0.86 ***
ql4	The regional economy will boost due to CPEC development.	0.63 ***
	Employment Opportunities
eo1	CPEC will generate employment opportunities in the area	0.76 ***
eo2	CPEC will create chances for a person to find a good job.	0.71 ***
eo3	CPEC will generate new business opportunities in the area	0.70 ***
eo4	Employment wages will become better in CPEC jobs	0.71 ***
eo5	CPEC will provide employment and skills for improved livelihood opportunities.	0.77 ***
eo6	More employment opportunities mean less crime.	0.63 ***
	Poverty Reduction
pr1	CPEC would mitigate poverty across its lines.	0.71 ***
pr2	CPEC will increase the business in the area, which increases the income of local people.	0.65 ***
pr3	CPEC will improve the personal income of the community	0.71 ***
pr4	CPEC will improve the economic conditions of the area which leads to a reduction in poverty	0.71 ***
pr5	CPEC will offer investment opportunities and new investment ideas	0.78 ***
	Educational Improvement
ei1	CPEC will provide the opportunity to get a quality education.	0.87 ***
ei2	Access to big cities through CPEC would create greater opportunities for quality education.	0.57 ***
ei3	Betterment of family income with CPEC is ensured through getting the education	0.88 ***
ei4	New educational institutions are expected to be established under CPEC.	0.6 ***
ei5	Road improvement encourages school enrollment, especially among females.	0.80 ***
ei6	The most fundamental societal needs like education are the main component of CPEC.	0.70 ***
ei7	CPEC will play a positive role in the improvement and development of education.	0.87 ***
ei8	CPEC will improve the quality of existing education.	0.63 ***
	Environmental Protection
ep1	CPEC will reduce environmental pollution in the area	0.56 ***
ep2	Prevention systems to cover possible environmental accidents and emergencies caused by the organization	0.77 ***
ep3	Recycling of remain and waste produced by the organization	0.57 ***
ep4	Filters and controls for emissions and discharges	0.83 ***
ep5	Recycling of the water used by the organization to re-use it in other processes and/or before evacuation down the drain.	0.79 ***
ep6	CPEC will improve general health and safety management practices	0.75 ***
	CPEC development
cpec5	Supporting services development (travel agency, hotel, restaurants, entertainment, etc.)	0.86 ***
cpec4	Development of CPEC is vital to the area	0.84 ***
cpec3	CPEC will play an important role in the area economy	0.68 ***
cpec2	CPEC attract more people to the area	0.58 ***
cpec1	CPEC should develop soon to improve the overall infrastructure	0.66 ***

Note: *** = significant at p < 0.001.

). Convergent validity displayed adequate value (above 0.50) and discriminant validity also met the criterion (above 0.70) recommended by Hair et al. [56] and Tanaka [57]. Additionally, we executed composite reliability to measure the internal consistency and confirmed (value greater than 0.70) that the items are significantly consistent [58].

4.4. Structural Model

Hypothesized model is tested through structural model (see Figure 1) in AMOS. We achieved satisfactory model fits; CMIN/DF = 2.001, GFI = 0.89, AGFI = 0.87, CFI = 0.93, TLI = 0.93, NFI-0.87, RMR = 0.017, and RMSEA = 0.047, as recommended by Hair et al., [56] and Tanaka [57].

The results (see

Table 5. Hypotheses Testing.

Hypotheses			Estimate	S.E.	C.R.	P	Remarks
H1. Quality of life	<---	CPEC	0.182	0.049	3.703	0.001	Supported
H2. Employment Opportunities	<---	CPEC	0.237	0.050	4.763	0.001	Supported
H3. Poverty Reduction	<---	CPEC	0.300	0.051	5.858	0.001	Supported
H4. Educational Improvement	<---	CPEC	0.144	0.080	1.790	0.073	Not Supported
H5. Environmental Protection	<---	CPEC	0.066	0.040	1.658	0.097	Not Supported

) show that the development of CPEC has a significant influence on the perceived quality of life (β = 0.182, C.R = 3.703, p = 0.001), which supported H₁. The development of CPEC significantly enhances perceived employment opportunities (β = 0.237, C.R = 4.763, p = 0.001) and perceived poverty reduction (β = 0.300, C.R = 8.858, p = 0.001), which supported H₂ and H₃, respectively. However, the development of CPEC did not affect the perceived educational improvement among the citizens (β = 0.144, C.R = 1.790, p = 0.073), which did not approve H₄. The development of CPEC also did not affect the perceived environmental protection (β = 0.066, C.R = 1.658, p = 0.097), which did not support H₅. R-square describes 1% variance in perceived environmental protection, 4% variance in quality of life, 1% variance in educational improvement, 7% in employment opportunities, and 11% in poverty reduction to be explained in the development of CPEC.

4.5. Robustness Checks

We applied the robustness test as regression analysis using SPSS to ensure the validity of the results, as shown in

Table 6. Regression Analysis.

Dependent Variables
	Environmental Protection		Quality of Life		Educational Improvement		Employment Opportunities		Poverty Reduction
	Model 1	Model 2	Model 3	Model 4	Model 5	Model 6	Model 7	Model 8	Model 9	Model 10
Step1
Control variables
Age	−0.011	−0.023	0.017	−0.007	0.028	0.010	0.019	−0.014	0.055 ***	0.021
Education	−0.004	−0.006	−0.012	−0.018	−0.068 *	−0.072 *	0.001	−0.006	0.025	0.018
Step 2
Indep. variable
CPEC		0.108		0.210 ***		0.151		0.282 ***		0.302 ***
R2	0.002	0.017	0.005	0.054	0.011	0.019	0.005	0.090	0.048	0.146
Adjusted R2	0.002	0.010	0.000	0.047	0.007	0.012	0.000	0.084	0.044	0.140
∆R2	-	0.014	-	0.049	-	0.008	-	0.085	-	0.097
F	0.463	1.502	1.090	22.665	2.562	3.448	1.089	41.218	11.246	50.121

Note: * p < 0.05., *** p < 0.001; N = 445.

. We also included age and educational level of the respondents as control variables to reduce the spurious results. The results of the SPSS also endorsed AMOS, as the development of CPEC has no effect on the environmental protection and educational quality and it has a significant influence on the perceived quality of life, employment opportunities, and poverty reduction. The age of respondents only has significant influence on poverty reduction and education of the respondents has only significant influence on educational improvement in the models.

4.6. Interview Results

We also conducted a face-to-face interview with 48 respondents being selected randomly from the selected areas. However, as mentioned in the research design, there were 16 respondents who did not meet the criteria i.e., less educated and were unaware of the CPEC. Hence, we excluded the response of the less educated people to reduce the spuriousness of the results. The results of 32 (28 male and only four female) respondents are presented in Figure 2.

The following questions were asked in the interview.

Q1. What do you know about the CPEC?

Ans: We received mixed results from the respondents. For instance, 16 respondents said they do not know about the CPEC. There were 32 respondents who confirmed that CPEC is a mega project initiated by Chinese and Pakistani government to improve economic growth and living standard. Most of the respondents believed that both Chinese and Pakistani government invested in several megaprojects of the CPEC to benefits economies.

Q2. Do you think CPEC will protect the environment?

Ans: Responding to this question, 21 respondents said “No” and only 11 people said “Yes”. Majority of the respondents said “the undergoing projects have created much pollution in the area. The infrastructure is in progress in the dust areas and people face a big problem to move. There is no environmental safety tool and CSR activity to protect or keep the air clean. Therefore, we do not see any environmental protection in the future”. The results of the interviews corroborate the results of the survey study, as there was an insignificant influence of the CPEC development on perceived environmental protection.

Q3. Will the CPEC improve quality of life?

Ans: We received a surprising answer to this question. Only 17 people opted “Yes” while 15 respondents said “No”. Majority of the respondents claimed “we have not yet observed any benefits despite initiation of several projects since last several years. Dearness is increasing and we have not yet received any incentive through the projects”. Although CPEC has not yet started formal operations but several projects and their startups are already running in the sampled areas. This shows that these communities were either neglected in these areas or they lack some resources to capitalize on the benefits of these projects. It gives alarming signals to government and policymakers to consider the communities for various incentives. These responses in the interviews are slightly different than the questionnaire’ results, as we have scrutinized that CPEC significantly influences perceived quality of life.

Q4. Do you believe that CPEC will improve literacy and education in the areas?

Ans: There were 20 respondents who answered “Yes” while only 12 respondents said “No”. Most of the people said “CPEC will improve the educational ratio as government of China can help in building educational institutions in the areas. Similarly, the Pakistani government can also focus on educational improvement in the sampled areas to enhance literacy. Many of the respondents also claimed that many Pakistani students will able to secure scholarship after CPEC start its formal operation”. Though, in the survey results, we have concluded that the development of CPEC has not a significant influence on perceived educational improvement.

Q5. Will CPEC create employment opportunities in the areas?

Ans: There were 24 respondents who believed that CPEC would create more employment opportunities while only 8 respondents were not favoring this. Majority of the respondents were very happy for CPEC and shown welcoming gestures to CPEC projects due to future employment and other prospects for the local communities. They believed that CPEC would open a new industrial zone, which would, directly and indirectly, increase the job opportunities for the local community.

Q6. Do you think that CPEC will reduce poverty in the areas?

Ans: We received a favorable response to this question where 19 people were saying, “Yes” while only 13 respondents said “No”. Majority of the respondents believed that CPEC would create new job opportunities, which in turn would reduce poverty in the areas. It corroborates the survey results that showed a significant relationship between the development of CPEC and perceived poverty reduction.

Q7. What do you think are the advantages or disadvantage of the CPEC?

Ans: We heard mixed responses to this question. For instance, 13 respondents said that CPEC would increase economic growth and it will positively contribute to international trade and export. There were nine respondents who said that it would strengthen the relationship between China and Pakistan. Four of the respondents said that CPEC could negatively influence the agriculture land and it can damage the connected farming sector. The rest of the respondents said that CPEC could be a game-changer for Pakistani people, who could find new opportunities and could enhance their living standard. In general, we concluded that people perceive CPEC as a positive initiative and favor the development of CPEC in the areas.

5. Discussion

This research assessed how the development of CPEC contributes to the three perceived economic goals, namely quality of life, employment opportunities, and poverty reeducation, and two social goals, namely educational improvement and environmental protection. We examined the influence of the development of CPEC on perceived environmental protection, quality of life, education, employment opportunities, and poverty reduction from an individual citizen’s perspective; therefore, we collected data from the individuals living in the areas that would be affected by the CPEC activities in Pakistan. We collected empirical data and this research is the first to test the empirical data that were gathered from Pakistani citizens living in the areas where the CPEC activities and projects are planned. Though, previous studies have tried to unleash the importance of CPEC in economic growth, poverty reduction, and environment, but have only relied on the qualitative data collected through the interviews [13,47,59]. Hence, the findings of this research are very useful in terms of theoretical contributions and practical implications. For instance, this research contributes to social exchange theory [16], which argues that, if the local communities perceive that the projects are beneficial, they will support; otherwise, they will oppose the development of the projects. In this perspective, we tested the model and examined that local communities see several advantages in CPEC and thus intended to support the development of CPEC. This research confirms that local communities perceived that CPEC would somehow affect the environment. This is because, during the development stage, their lives are affected by the construction of roads and transportation, which is inevitable due to the materials used for these projects and also the geographical characteristics of the areas where these projects are planned. Major routes of the CPEC cross sandy areas where the livelihood of the people significantly affected, due to less green areas, and more severe weather conditions, particularly in the summer. Therefore, their perceptions in term of the environment are not favorable; however, the environmental protection agency should take initiatives to safeguard and protect the environment from any hazardous outcome of these projects. These agencies should also involve the local communities in their information sharing programs and to apprise them of the possible environmental threats and the remedial steps they are taking to protect the environment. Durani and Khan [43] claimed that CPEC does not correctly protect environmental pollution in the area and, if it does not effectively prevent, it can create many environmental problems. As pointed out by Kalkbrenner and Roosen [60], constructions and new projects create several barriers for local communities and they can negatively affect their daily activities. However, we found that the development of CPEC will significantly improve the quality of life of the citizens. As pointed out by Yu, Cole, and Chancellor [61], new projects benefit citizens in term of earning and new experiences which improve their life standards. Similarly, Haq and Farooq [38] also pointed out that CPEC will significantly improve quality of life of a common citizen. We found that citizens of Pakistan do not favorable perceived that CPEC would improve their educational standard. Our findings revealed unexpected results in the context of quality of education. Though, CPEC has not yet initiated any project for educational purpose nor have debated about educational improvement. Hence, their perceptions reveal insignificant outcomes in terms of education. Moreover, many Pakistani citizens are studying in Chinese universities; parsimoniously, they do not believe that the education system gets prominent attention in Pakistan due to CPEC. This research scrutinized that individuals perceive a significant improvement in employment opportunities due to the development of CPEC. In line with Hansen et al. [62], who argued that new projects and international resources create new opportunities for the betterment of people. Moreover, Kanwal et al. [30] also revealed that CPEC will significantly expand job the circle of job opportunities for local communities and a common man in Pakistan. Additionally, Chen et al. [27] also revealed that CPEC is a mega project and perceived for millions of job in different sectors. Our findings favored Asomani-Boateng et al. [36], who scrutinized that CPEC will enable citizens to easily find jobs. People perceive that job opportunities (created through CPEC) will reduce poverty among the people. Hence, CPEC can be a significant predictor of poverty reduction [22]. Local people expect numerous job opportunities and high earning position via CPEC, which can mitigate their poverty [31]. In general, our findings are related to Kanwal et al. [30], where several benefits of the CEPC; employment opportunities, poverty reeducation, and social welfare are reported.

Overall, our results strongly match Kousar et al. [28], who revealed that CPEC is a useful tool for sustainable economic development. It can bring a positive change in the economic goals, such as quality of life, employment opportunities, and poverty reduction in both nations.

5.1. Implications for Practices

This research has unleashed several significant implications for policymakers and individual citizens of Pakistan, as well as China. For instance, this research revealed that the local communities perceive standard life, job opportunities, and low poverty through the development of CPEC. The majority of the individuals have a positive attribute towards the development of CPEC. Therefore, they can support the development of CPEC in expected future benefits. Local citizens perceive the quality of life in the areas for future benefits. Hence, they should be morally supported to enhance their living standard. The Pakistani government needs to formulate strategies for old age people to consider their wellbeing and living standard. The government also needs to promote CPEC mega projects to smooth the operational activities in the areas. It is very crucial for government offers to create awareness of CPEC projects and its advantages among the citizens. This approach will further facilitate operational activities of CPEC and mega projects in the areas. Our findings revealed that citizens have not satisfactory perception in terms of environmental protection. This is because CPEC is in progress and infrastructure of the connected areas is affected. Hence, their opinion has diverted due to difficulties and barriers that occurred due to CPEC routes. Chinese and Pakistani governments are both advised to focus on environmental safety and green activities to create a pleasant environment. They need to reduce environmental pollution in the connected areas and care about their health and safety. Generally, environmental policies are lacking in Pakistan in the private and public sector. The Pakistani government needs written policies for environment protection as to grab the attention of local comminutes in term of environmental safety. We also revealed that citizens have not favorable intention regarding education that can be improved through CPEC. They do not consider CPEC as a significant predictor of quality education in the areas. It gives alarming signals to Chinese and Pakistani governments to initiate educational programs and awareness in the regions. Education is vital and crucial for the wellbeing; hence, it should be a part of CPEC operation. The Pakistani government needs to build new schools and universities in rural areas. Like mega projects that can enhance economic growth and create job opportunities, building new schools and universities will enable people to get higher education because travel distance is a major barrier in getting an education. Additionally, both governments (Chinese and Pakistan) should give strong emphasis to mega projects to enhance the quality of life and create job opportunities that can reduce poverty among the areas. Many people living in rural areas of Pakistan are in the poverty line. The government needs to give special incentive and job quotas to the rural areas to help them get rid of poverty.

5.2. Significant Implications for Policy Makers

Based on the findings that were derived from empirical evidence, this research recommends a few significant implications for policymakers and government. We scrutinized policymakers should focus on the betterment of social goals of the communities via CPEC.

• The findings reveal that the environmental and educational goals of CPEC need to be better promoted to the Pakistani public. In other words, the findings suggest that there needs to be better public information, education, and media coverage of CPEC to the Pakistani public to only convey the goals.
• The government needs to build new schools and new educational institutes with affordable charges in rural communities as spur educational level in local citizens.
• Government financial institutions and banks need to offer an interest-free loan to the citizens for startup activities. It will enable them to start desire business easily with adequate financial resources.
• New industries should be launched in rural areas to increase the employment ratio. It will directly and indirectly reduce the poverty of the citizens. The government needs to give opportunities to foreign investors and let them invest in the industrial sector. However, the government must consider environmental protection while promoting industrial sector in the areas.
• Based on the interview results, we suggest policymakers initiate new projects for quality of life, as many respondents do not perceive CPEC as a fruitful for quality of life.
• Achievement of SDGs is the main goal of every country worldwide. The findings of this study will empower policymakers of China and Pakistan to modify their strategic pattern for SDGs.

6. Conclusions

Based on the empirical evidence that was gathered from 445 citizens (323 male and 122 female) via a structured questionnaire, the findings display that educated sections of the Pakistani public perceive that CPEC will bring the benefits such as quality of life, employment opportunities, and will help in poverty reduction and will not bring benefits in the areas of the environment and education. However, we did not find significant results for the improvement of environmental protection and quality of education. This research recommends policymakers to shape new educational institutions, inspire investors to capitalize in the industrial sector, and verbalize environmental strategies to unbridle the supreme benefits of CPEC. The government needs to focus especially two important projects, named “environmental and educational”, as citizens perception of the mentioned projects is not favorable. Hence, the government needs to build better strategies in order to convenience the people properly. In particular, we give strong emphasis to environmental strategies, because evidence collected through the questionnaire and interview did not give support for perceived environmental protection. Moreover, policymakers also need to consider the quality of life indicators, because many respondents in the interview do not significantly perceive CPEC as a favorable project for high quality life. Furthermore, government official and policymakers are instructed to form alertness of CPEC projects and their welfares among the communities to get the support of common citizens. To end, this study strongly recommends making policies for social goals to be effectively accomplished through CPEC.

Limitations and Future Research

Similar to other research studies, this research has also several constraints, which can be mitigated in future studies. The first limitation of this research is sampling scope, as it focused on Pakistan and missed the worthy area such as China. We strongly recommend data collection from Chinese citizens to articulate the results in a better way. Furthermore, data from both samples (Pakistan and China) in a single study will provide unique comparative results. Second, cross-sectional data are criticized for common method bias. Therefore, we recommend an interview or longitudinal data from a large population for future research studies. We conducted interview with a small sample of 32 respondents, but they were mostly from educational sector. We recommended investigating the perceptions of less-educated communities if they differently perceive the CPEC. Third, we did not consider the perception of male and female, high or low educated and income citizens in this study, which opens a new zone for future studies. Additionally, the model is tested in specific regions of Pakistan where CPEC’s routes are crossed. We advise other regions that have indirectly connected with CPEC to assess how they perceive CPEC for their future life. We revealed that Pakistani citizens significantly perceive high-quality life, more job opportunities, and a low poverty line through the development of CPEC, while insignificantly thinking about the protection of environment and quality of education. Future researchers can test the model further to unleash the difference between the revealed and expected results. Many people have already started their job in CPEC projects. It will give initial signals to assess their (people who are working in the CPEC projects) income level and quality of life is improved.